New Law Allows All Homeowners to Install Water Saving Landscapes

Senate Bill 198, passed by the Texas Legislature and signed into law in June 2013, prohibits property associations (POAs) from banning water-efficient, drought-resistant landscaping. The law went into effect last September 1.

Under SB198, POAs can still require prior approval before homeowners switch to such landscapes, and POAs can adopt guidelines on what kind of plants and designs are acceptable as long as they do not “unreasonably restrict” water-conserving landscapes. This bill enjoyed a wide range of support from environmental groups like Clean Water Fund to Texas Community Association Advocates and businesses like The Home Depot.

A Texas home shows attractive drought-resistant landscaping.

  

Texans know that water is in short supply in our state for a variety of reasons, such as rising population, drought, and a changing climate. Municipal water demand is rising faster than any other sector and by 2060 is predicted outstrip all other sectors, including agriculture. 

Lawn watering is the major driver of municipal demand, and can account for as much as 60% of a household’s water use. Replacing non-native turf grasses with drought-resistant native plants and ground cover can lower a homeowner’s water bills and save communities money that would otherwise be needed to purchase new sources of water and build expensive new water treatment and distribution infrastructure. It can also leave more water in our aquifers, lakes, and rivers for wildlife and the human recreation and industry these ecosystems support.

Installing a drought-tolerant landscape does not mean limiting yourself to grass and cacti, or creating an 'Arizona look' in your front yard. These landscapes can include a wide variety of colorful plants that provide food and shelter to native wildlife. 

SB 198 allows POAs to maintain aesthetic harmony through a variety of means, by for example, limiting plants to those from a specific list or catalog, requiring a minimal amount of turf grass, directing that all vegetated beds have a border whose color and style is compatible with the home's architecture, and banning or limiting the use of gravel. However, POAs are no longer allowed to ban drought-tolerant landscapes outright. If properly implemented, SB 198 can provide a 'win-win' for proponents of water conservation and POA advocates alike. 

David Foster is State Director for Clean Water Fund, a nonprofit that provides free presentations and workshops on how POAs can implement SB 198. See www.cleanwaterfund.org/xeriscape

Cutting Corners on Bankruptcy Searches Can Be Costly

By following best practices in bankruptcy checks, attorneys protect community associations and their management team.  One unequivocal principle of bankruptcy is that all collection activities must stop when an owner files for bankruptcy protection.  Many community associations may not realize the true cost to a community and/or management company if a collection notice, or even a simple statement, is inadvertently sent to a debtor in bankruptcy. 

A short time ago, settlements in stay violation cases averaged $3,000.  Recently, settlements in these cases are hovering around $7,000, with some even reaching the $15,000 range.  With large portfolios and automated procedures, following best practice for flagging protocols and communications with legal counsel are a must to prevent a violation of the automatic stay and painful settlement checks.

  

By filing for bankruptcy, an automatic federal mandate to stop all collection activity surrounds the debtor.  The automatic stay is a federal court order.  Make no mistake, despite its automatic nature federal bankruptcy judges hold the automatic stay sacrosanct.  Bankruptcy judges will send the appropriate message to any creditor that the judge feels does not implement protocols to prevent even seemingly harmless violations of the automatic stay.  It is a strict liability standard, so the fact that the notice or statement may have accidently gone to the debtor does not matter.  If a notice is sent to a debtor in bankruptcy, the automatic stay has been violated. 

Checking the bankruptcy status as part of each step of the collection or compliance process falls on the shoulders of legal counsel.  Checking bankruptcy status is not the duty or concern of the board members or community manager.  Their duty is to notify legal counsel and properly flag the account to prevent notices and statements from the management or board level.  Lawyers can obtain access to a nationwide government website that will document every bankruptcy filed in the United States.  Bankruptcy checks by lawyers are quick, affordable, and well worth the time, considering that one letter can result in a settlement payment by the association and/or management of $7,000 or more.

Any time or money saved by avoiding title and bankruptcy status research in the proper databases is expended tenfold in the defense of a suit. Electronic searches are an efficient, reliable means to preserve precious community association resources.  By following this best practice, attorneys can help to avoid unwanted litigation against the community association and/or management company.  

Brady E. Ortego, of Roberts, Markel, Weinberg, PC, is an attorney specializing in community association law.  He is a frequent author and educator on issues affecting community associations and is active in community association industry support groups such as the Community Associations Institute.   

Guidelines for the Homeowner Forum

As a board member of your HOA, you’ll find it worthwhile to schedule times to get input from homeowners, whether there is a specific issue on which opinions may differ, or to get a sense of direction for many decisions the board makes. 

Homeowners may attend any board meeting and be given an opportunity to comment on agenda items at the appropriate time.  Or the association may wish to schedule a Town Hall type of forum to hear owners’ concerns and to answer questions.

The following guidelines are helpful for board members to guide the discussion and share with homeowners in advance of meetings- perhaps through an association newsletter or website.

Suggested Guidelines for Homeowner Forums

In the state of Texas, residents are encouraged to attend and observe association board meetings, except during executive sessions. If you’d like to bring an issue to the board’s attention, you’re welcome to speak during the homeowner forum—generally at the beginning of the meeting.  So that everyone who attends has an opportunity for a meaningful exchange with the board, we ask that you observe the following guidelines:

·         Notify the association manager in advance of the meeting that you will be attending the board meeting and would like to speak.

·         Each person will be allowed to speak no more than five minutes. Please respect the volunteers’ time by limiting your remarks.

·         If you need more than five minutes, please put your comments in writing. Include background information, causes, circumstances, desired solutions and other considerations you believe are important. The board will make your written summary an agenda item at the next meeting.

·         Although we’re all neighbors, this is a corporate business meeting. Please conduct yourself accordingly.

·         You may be asked to sign in and provide your contact information.  You will be called in the order you entered. This also allows the board to contact you if we need further information and to report back to you with an answer.

·         The homeowner forum is an exchange of ideas, not a gripe session. If you’re bringing a problem to our attention, we’d like to hear your ideas for a solution too.

·         To keep the meeting businesslike, please refrain from speaking if you’re particularly upset about an issue. Consider speaking later, speaking privately with a board member, or putting your concerns in writing and e-mailing them to the board.

·         Only one person may speak at a time. Please respect others’ opinions by remaining silent and still when someone else has the floor.

We may not be able to resolve your concerns on the spot, and we will not argue or debate an issue with you during the homeowner forum. We usually need to discuss and vote on the issue first. But we will answer you. 

Research Matters: How cutting corners in legal research costs community associations

Seemingly trivial oversights or cost/time saving techniques are often the root of an association and its management company being co-defendants in unwanted litigation. Our firm has represented management companies, managers and associations in these matters in an exceptionally large number of cases.  Community association lawyers play an integral part in reducing the potential occurrence of unwanted litigation. This article focuses on the proper method for checking record title in collection matters.

The Reliable Way to Do Title Searches

County Title Records

Each time a collection or compliance step is taken, record title to the property should be verified. Reliable title research takes mere minutes, yet many folks in the community association industry, lawyers included, fail to follow best practices. They rely on questionable resources rather than confirming record title through the most accurate resources.  

In many instances, the appraisal district records are used as the sole resource for determining ownership.   While these records can be a good resource for finding alternate addresses, appraisal district records are not determinative of record title to real property.  

 

The only source for current record title is the real property records of the county in which the property is located.  Many counties grant access to these records with “unofficial” documents available at no charge.  For counties that do not grant this type of access, subscriptions to the databases and/or vendor charges for title work are affordable and worth it.

The potential risk to the association and its management company is that a demand for collection or compliance may be sent to the incorrect party or address.  A suit against the community association, management company, and possibly the manager, for violation of the federal and state debt collection laws and a wrongful foreclosure is born. 

  

The amount of protection gained from a quick and affordable title search is immeasurable and good insurance against unwanted litigation.  Board members and management companies should check with their legal counsel to ensure that they are protected by reliable title searches.

Brady E. Ortego, of Roberts, Markel, Weinberg, PC, is an attorney specializing in community association law.  He is a frequent author and educator on issues affecting community associations and is active in community association industry support groups such as the Community Associations Institute.   

Selecting Qualified Vendors

HOA expert Chuck Miller recently wrote about Selecting Vendors in HOA Pulse, an electronic newsletter.

“Unless an Association uses its own employees to perform ongoing services, it must generally outsource to third-party vendors to provide the necessary services. If the board of an Association is inexperienced at selecting vendors, the best first step is to select a qualified management company that has experience in the vendor selection process. With years of experience in performing the vendor selection process, such companies ensure that vendors are chosen based on their specialties, excellence in working for other communities, financial protections, and licensing, and that they have appropriate contract provisions.”

One of the benefits of working with a CMA manager is the ability to compare bids and select qualified vendors whose reputation and skills meet our exacting standards.

CMA adds value in examining and requiring insurance and standard contracts which protect your association’s interests.  From his summary or general criteria to use when selecting vendors, Miller makes these points about vendor insurance and contracts.

Insurance

“A business must carry insurance that covers injuries to residents, injuries to its employees, and damage to the property of either residents or the vendor that occurs during the fulfillment of the contract. Proper insurance protects both the vendor and the community from financial damages that occur in relation to the work performed. This is an often overlooked criteria, as too many managers assume that proper insurance is carried without ever requesting proof of insurance.”

Contracts

“Contracts should only be executed when they contain the proper provisions and information. This includes credentials of the contractor, the start and end date of the contract, compensation and terms of payment, description of work to be performed, provision for the termination of the agreement, provision for warranties for services and materials, proof of insurance, and provision for legal costs. It is generally wise to have Association legal counsel review contracts prior to execution. This is one of those areas where the saying “an ounce of prevention is worth a pound of cure” really applies.”

Board Basics: Conducting Efficient Board Meetings

While meetings are a fact of life for board members, no one wants to spend more time in them than necessary. Consistently long or ill-planned meetings will result in chronic absences and apathy, and very little will be accomplished.

Well-organized meetings can set the tone for all association business and board work. The following tips will help you and your fellow board members conduct efficient, effective meetings that get results for your community:

• Set a board meeting schedule and stick to it.
• Whether you schedule monthly, bimonthly or quarterly meetings, always meet at the same time and day of the month and—whenever possible—in the same location.
• To set a business-like tone for the meeting, select a meeting location other than a board member’s home. Most community centers, libraries and similar municipal facilities—and some local churches—rent meeting rooms for a nominal fee.
• Notify all association members—resident and nonresident—of any meeting date, time and location well in advance. Post all scheduled meetings on the association’s website and in newsletters. (Note:  Texas state law mandates a 72-hour advance notice of board meetings).
• Educate yourself about the items on the agenda before the meeting. Read committee reports, and carefully study documents like financial statements and vendor contracts. Be prepared to ask questions and make informed decisions.
• Use a timed agenda that allots specific times for approving minutes, hearing manager and committee reports, discussing unfinished and new business, and conducting a brief homeowner forum. Sixty to 90 minutes, depending on how frequently you meet, should be sufficient to accomplish association business.
• Open your meetings to association members, and include time on the agenda for a homeowner forum after other business is concluded. Allow three to five minutes for each person to speak. Once the meeting is called to order, members may observe, but they should not participate in board discussions.

From Community 411, Fall 2013 Newsletter.

Keep Water Flowing for Growth and Prosperity

Vote on November 5

This article contains information reported in the Dallas Business Journal, October 18-24, 2013, pp. 2-3, Thirsty Work.

As a Texas homeowner, you can vote to ensure the continued growth and well-being of your community.   Not only suburban lawns and shrubs have suffered through the prolonged drought; Texas business and new home growth could dry up if Texans don’t keep the tap of plentiful water flowing.

The November 5 election tees up a critical decision for North Texans.  If passed, Proposition 6 will create the State Water Implementation Fund for Texas, transfer $2 billion from the Rainy Day fund and set up a framework for a sustainable revolving fund with revenue from completed projects refilling the fund for future projects. 

If approved, Prop 6 is expected to create thousands of engineering and construction jobs. 

Municipalities are the largest users of water, selling water to residential users and businesses.  Certain types of manufacturing such as semiconductor plants also use large volumes of water.  On average it takes one-third of a gallon of water to make one semi-conductor chip.

Access to a water supply is one of the first things the Huffines brothers look for when they decide to build a residential community, according to Dallas-based Huffines communities, a builder of master-planned communities.

As one of the fastest growing metropolitan areas in the country,(according to the Dallas Regional Chamber of Commerce),  the Metroplex has much to gain from plentiful water.  Economic recession plus drought temporarily dampened homebuilding. Texas housing has staged a strong recovery in recent months, and new jobs are outpacing the national average.

To read more about Proposition 6, see these Dallas Business Journal articles. http://www.bizjournals.com/dallas/news/2013/10/14/most-texans-support-spending-2b-on.html

http://www.bizjournals.com/dallas/blog/2013/10/how-gov-perry-plans-to-address-dfws.html

Also, visit the http://www.watertexas.com website.